OSHA violations have many ramifications locally

Republic Steel paid a steep price for citations, but some are resolved more amicably

Howard Eberts, OSHA's area director for Cleveland, said incidents in which employees are injured are preventable and he urged companies to be proactive. Eberts suggested companies take advantage of free inspections, like those available through the Ohio Bureau of Workers' Compensation, to identify problems to be solved. There are no repercussions with those outside inspections, he said, but if OSHA finds a hazard, they will issue a citation.

If a company is cited and has questions, Eberts recommended its leaders request an informal conference as soon as possible. The companies will then get a face-to-face meeting with Eberts to discuss how long the violations could take to correct and whether the penalty amounts could be adjusted.

Canton-based Republic Steel in April reached a sizable settlement with the U.S. Department of Labor's Occupational Safety and Health Administration. The agreement helped the company settle more than 100 alleged violations at four of its plants and laid the groundwork for a comprehensive health and safety plan Republic Steel will use for its plants going forward.

The citations were “very significant,” said Jim Frederick, assistant director of health, safety and environment at the United Steelworkers. But Republic Steel reached out to the union from the start of the inspections, and the two worked together to create a plan that looks at health and safety in a holistic way across the company, he said.

While Republic Steel's settlement may be a bit wider in scope than most, lots of companies across Northeast Ohio are familiar with the work that goes into resolving violation citations from OSHA and moving their companies forward.

In OSHA's Cleveland region, there were 661 inspections in fiscal year 2013, with an average of 3.2 citations per inspection. When a company receives a citation, its management can choose to either contest the citations, pay the penalties or schedule an informal conference.

After the conference, companies can still choose to contest the citations. An expedited formal settlement can also be offered to companies without serious, willful or repeat violations, according to an OSHA official.

Paying the price

At Republic Steel, the company faced its own issues as an organization that had undergone significant leadership changes in its time. Republic Steel's alleged violations spanned four plants, three of which were in Ohio, and included failure to provide fall protection or machine guarding for its employees.

The company agreed to abate all the citations in an extensive settlement, which also included an agreement to pay $2.4 million.

But the company's troubles were not over with the investigations in 2013. In February, an employee was killed in a rail yard accident.

On May 19, the company was issued a “serious” citation with a $7,000 proposed penalty for conditions at the Lorain plant leading to the fatality. The citation said the tracks were covered with ice and snow, which led to cars derailing and the fatality. A digital copy of the citation was provided to Crain's by OSHA. A call to the company was not returned as of press time.

“It was beyond disappointing to see an additional fatality at Republic during this time frame; it is another reminder of the safety problems that have been seen at Republic over the years,” said Kim Nelson, OSHA area director in Toledo. “It is our sincere hope that Republic's willingness to institute an effective comprehensive safety and management system will result in a significantly improved safety culture and the end unsafe work place conditions.”

Republic Steel also declined to comment on the $2.4 million settlement beyond a press release, but Frederick said the union members' reaction to the new health and safety program that was part of the agreement has been one of “positive skepticism.”

The company has some real issues to deal with, Frederick said, and members want to see it succeed. “It won't be easy,” Frederick said.

The new program will take on challenges in a holistic way. Instead of just fixing a piece of broken equipment, it will call for the company to look at why the equipment is failing and determine if there is a problem upstream that needs to be corrected, Frederick said.

The next two years will be critical, Frederick said, as the settlement agreement with OSHA outlines what needs to be done in that timeframe. But the health and safety plan could have an even further reach. While plenty of companies with which the United Steelworkers work have some sort of plan, this comprehensive one serves as a good example, he said.

“This raises the bar,” Frederick said.

A learning process

Deciding the course of action to take when a company receives a citation isn't as simple as assessing the price tag on the penalty, lawyers say.

Mike Hanna, a partner at Squire Sanders' Cleveland firm, recommends that companies take advantage of OSHA's informal conference, because there's a “give and take” that he thinks is valuable.

“It doesn't have to be confrontational,” he said.

It's important for companies to look at whether the abatement is appropriate, Hanna said, because employers often get sucked in by low penalties, but the cost to abate problems can be significant.

Vincent Norwillo, a partner at Gonzalez, Saggio & Harlan LLP in Cleveland, said he thinks OSHA has been more “punitive” under the current administration, but also willing to offer compromises to resolve less serious violations at a lesser penalty.

But penalties aren't usually that expensive to begin with, and it's important for companies to keep a “clean safety record,” he said. OSHA logs can affect a company's ability to qualify for big projects, Norwillo said. And previous violations could reflect poorly on a company if the company were to get another citation in the future.

Victor Geraci, a partner at Fisher & Phillips LLP in Cleveland, said while abatement is the costly part of citations, it's necessary in terms of employee relations and liability control.

Even if a company wants to dispute the legality of the citation, it's important to fix the underlying issue as soon as possible, Geraci said. The potential for liability issues for failing to correct an identified problem are great.

New Wave Plastics LLC said it got right to work when OSHA visited its Cleveland plant last fall. OSHA cited the company for 13 safety violations in March.

But CEO T.R. Mitchell said he thought the company was already about 90% compliant — they just didn't have their paperwork up to OSHA's standards. The citations focused heavily on training and communication, including failing to train employees on personal protective equipment, forklift safety or use of chemicals in the plant. The case is pending as New Wave Plastics waits on test results related to a citation for combustibility with dust.

But OSHA's been very helpful as the company works to update its documentation, Mitchell said.

“You kind of learn as you go,” Mitchell said of starting a plant.

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